Pakistan not seeking fresh Chinese financing, Aurangzeb tells FT
- Islamabad seeks to shift its financing strategy
Pakistan's Finance Minister stated the country is not seeking additional Chinese financing, instead focusing on diversifying external sources and engaging the US for trade, investment, and a $10 billion stabilization facility.
- Pakistan's shift in external financing strategy.
- The $10 billion US exchange stabilization facility.
- China's position as Pakistan's largest creditor.
Pakistan is not currently seeking additional financing from China as the government seeks to diversify its external financing sources and revive access to international capital markets, said Finance Minister Muhammad Aurangzeb.
Speaking to the Financial Times, the finance minister said Pakistan’s engagement with the United States was aimed at strengthening trade and investment flows and providing a confidence signal to international investors.
He, however, insisted that the choice between the US and China was “not an and-or discussion”, reported FT, as Aurangzeb confirmed that Pakistan was not seeking additional financing from China at the moment.
FT, citing World Bank figures published in December, said China remains Pakistan’s largest creditor by far, holding 23% of its $129.7 billion in total outstanding foreign debt as of 2024.
The development comes as Islamabad seeks to shift its financing strategy from repeated bilateral support towards market-based borrowing.
Last week, Aurangzeb confirmed that Pakistan formally sought a $10 billion Exchange Stabilisation Support Facility from the United States, saying the initiative is aimed at strengthening foreign exchange stability and sending a positive signal to international capital markets rather than securing a conventional loan or credit line.
Talking to Business Recorder, the minister confirmed the request while saying that negotiations were ongoing with the US; however, there is nothing final so far.
Aurangzeb told FT that the $10 billion swap line that Pakistan seeks intends to serve as “a confidence signal” to private investors.
He added that he saw a “very important role” for the Export-Import Bank of the United States (ExIm Bank) and the US International Development Finance Corporation (DFC), which he said had shown “risk appetite for Pakistan”.
“It’s a combination of engagement with the US primarily to focus on trade and investment flows, and to help signalling with respect to international capital markets,” he told FT.
The minister shared that the government had received “constructive engagement” from Washington over the $10bn swap line and hoped to receive an answer “in the next couple of months”.
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